If a radical Labour government were elected and took real anti-capitalist measures, the only way to stop capital flight would be by taking control of high finance, argues Mick Brooks.

Far from being a star industry earning foreign exchange for the rest of us, the banking sector has been a ball and chain upon the economy – a wrecking ball which, through the bankers’ recklessness and stupidity, helped cause a crisis that shattered millions of people’s livelihoods.

However, we do need banks. The distinction must be drawn between high street banking, where working people and small businesses pay in and draw out money for everyday transactions, and investment banking. Part of the problem in past years was that our retail banks have been lured by the thrill of betting for high stakes in global markets – and have lost our money.

The big banks based in the City and Canary Wharf draw in enormous sums from all over the world and invest the money globally. The vast majority of these banks are foreign-owned. It is argued that this gives us an advantage “like Wimbledon”. Our tennis players never win the top prizes at SW19, but we are said to gain from owning the courts and charging entrance fees.

The trouble with that argument is that the global banks are only based in London because they have been offered ‘light touch regulation’ by successive governments. In other words they are here because they get more and give less here than anywhere else.

At present Northern Rock and Bradford & Bingley are owned outright by the state. The Government also has a big majority holding in RBS (86%) and an effective controlling interest in Lloyds TSB. We missed a golden opportunity to buy them up for a song when they were on their knees in 2007 and 2008 and their share prices were in the doldrums. Instead they were rescued by the state. Both New Labour and the Con-Dems have insisted that the banks continue to behave like capitalist institutions, even though they are effectively nationalised. The Government is desperate to return them to the private sector, so they let them get away with murder.

Banks like Barclays and HSBC that remain profitable must also be taken over as a priority, otherwise we shall not have an effective state-owned, unified banking system. As for compensation, these banks should be reminded that most have received huge state handouts since 2007 and they have inflicted massive  damage on the rest of the economy in the meantime.

We need to control the working of the banks. The existing boards should be scrapped and the chief executives sacked. New boards should be established with the bank workers and the labour movement generally represented as an important part of management.

By separating off the useful side of retail banking from speculative activity we can immunise the rest of the economy from the deleterious effects of the banking crisis. Retail banking will be safe and deposits guaranteed.

Won’t the finance industry lose jobs? They have already been shed in tens of thousands since 2007, and they will continue to leach away under capitalism. Most of the bank employees, even in the City and Canary Wharf, are not high flyers getting obscene bonuses. They are ordinary working class people with the same interests as other workers. This is even more true of the vast majority of finance workers in the high street banks.

Any serious proposal to take over the banks will meet with furious resistance from the capitalist establishment.  The situation would be completely polarised. The policy would need to have massive popular support, otherwise it would be bound to fail in the teeth of capitalist resistance. A Labour Government committed to the plan would have to take drastic action upon being elected, including legislation to try to stop capital flight in its tracks and to reintroduce exchange controls. All countries had exchange controls before 1979, when Britain was the first major country to abolish them under Thatcher. China retains them, as does India. The Malaysian Government wisely reintroduced them after the 1997 East Asian crisis.

Exchange controls separate the export of money to pay for imports from money exported for “investment”. For capital controls to be effective, they would have to be implemented by those who actually understand foreign exchange transactions because they undertake them every day. This means winning the support of bank workers. This has happened before: during the Portuguese Revolution in 1975 bank workers actually occupied the banks and forced their nationalisation.

When the thief Willie Sutton was asked why he robbed banks, he replied, “That’s where they keep the money.” The banking system disposes of all the monetary resources in Britain, still a potentially immensely rich country. With the banks under social ownership, finance could be provided for a vast programme of green jobs, social house building and useful public works. The banks would then be playing their part in mopping up unemployment and creating a better Britain.

The arrest of Rebekah Brooks on three charges of conspiracy to pervert the course of justice takes the investigation on phone-hacking by News International to a wholly new level. But what do socialists say about the power of the corporate media in the first place? asks Mike Phipps.

Latest developments make it difficult to see the Murdoch empire ever recovering from this scandal. Far more interesting is how more and more threads in the investigation lead to Downing Street – the close relationship between Brooks and David Cameron, as well as other senior figures in government and the involvement of Cameron’s former spin doctor Andy Coulson in authorising phone-hacking.

Culture Secretary Jeremy Hunt could still lose his job for conspiring with Murdoch in his £8 billion bid for BSkyB which Hunt was supposed to be adjudicating impartially. Now an email revealed to the Leveson Enquiry shows that Hunt colluded with Murdoch to prevent a public inquiry into phone-hacking and help “position” Downing Street on the issue. The trail keeps leading back to Number Ten – after all it was Cameron who transferred responsibility for relations with Murdoch to Hunt after Business Secretary Vince Cable indicated his hostility to the takeover bid and the NewsCorp empire in general.

Ed Miliband has rightly called for Hunt to go, but the roots of the current crisis lie in the New Labour years. They go back to Tony Blair’s 1995 decision to abandon long-standing Labour policies on media ownership and do whatever was necessary to secure the backing of the Murdoch empire. The power of his businesses was allowed to grow unchecked, drawing in politicians and police officers alike.

Of course, the current Government has been equally supine. As NewsCorp sought to bid for a majority stake in BSkyB, tens of thousands protested online and Ofcom advised that the takeover be referred to the Competition Commission. Instead, the Culture Secretary secretly negotiated with the company to let the deal proceed.

MPs on the Culture Select Committee pulled their punches, fearful that their private lives would be put under surveillance by Murdoch’s “state within a state”. When it emerged last summer that News of the World operatives had not just spied on politicians and celebrities, but hacked into the mobile phone of a murdered teenager – endangering the police investigation in the process – public outrage triggered the Leveson Inquiry into press regulation and ethics.

Now, as the Campaign for Press and Broadcasting Freedom argues in a new panphlet*, there is a once in a generation opportunity to put clear limits on how much of the media corporations like Murdoch’s should monopolise. Self-regulation too has clearly had its day. The failure of the voluntary Press Complaints Commission to enforce its own Code of Practice and the defection of key newspapers from its ranks underlines the need for a statutory independent regulator and a stricter code of behaviour.

The enormity of the abuses unmasked in the Leveson Inquiry underline why 80% of people say they no longer trust the media, but it’s more difficult to develop strategies to tackle the problem. Nobody wants state censorship. The concentration of media ownership could be restricted by legislation, but this doesn’t resolve the fact that in a grossly unequal economic system it’s the corporations that own the air waves and the press and they can exercise a huge influence on public opinion and perception and therefore elections and policy as a result. Guaranteeing a right to reply or promoting greater diversity in the media doesn’t begin to tackle this imbalance – although it might be a start.

Michael Meacher MP has called for press ownership to be restricted to UK citizens. This might deal neatly with the Murdoch problem, but it’s not the main issue. Obviously, NewsCorp’s 37% control of the British newspaper market is too high, but where should the limit be set – and how will it stop the media remaining in the hands of multi-millionaires, albeit a larger number of them?

What should we do about headlines like “Muslim gang jailed for kidnapping and raping two girls as part of their Eid celebrations?” which appeared in the Daily Mail in April? Press self-regulation won’t tackle that – a statutory body with legal powers is necessary, involving reader and newspaper union input.

Ultimately the call to democratise the media is a call to democratise capitalism itself. It’s a call to take control of news and information out of the hands of fabulously wealthy corporations and to stop them serving their narrow agenda.

• A Chance for Change, by the Campaign for Press and Broadcasting Freedom, can be downloaded from their website www.cpbf.org.uk.

We reprint below extracts from two articles concerning the policing of the Olympics that first appeared on the blog of Kevin Blowe of Newham Monitoring Project. While the police were claiming in March that nobody was intending to protest against the Olympics (in spite of the two separate campaigns reported in our last issue – have they stopped reading Briefing?), the police and military have been amassing greater powers to deal with protest and have even installed rooftop missiles close to the Olympic site, with little explanation of their intended use.

The Protection of Freedoms Bill was introduced in February 2011, supposedly to “restore freedoms and civil liberties through the abolition of identity cards and unnecessary laws.” The Bill includes a revision of anti-terrorism stop and search powers that had been abused so routinely that the European Court of Human Rights ruled they were illegal in January 2010. What is strange is that the Government plans to hang onto a power that, according to statistics, is never used.

The contentious anti-terrorism stop and search powers were under section 44 of the Terrorism Act 2000, which allowed police officers to stop and search pedestrians and vehicles without needing any suspicion. As a result of the European Court’s ruling, the Home Secretary immediately repealed sections 44 to 47 of the 2000 Act and introduced a new section 47A, which was supposed to be more targeted, proportionate and relate only to a specific area or place.

The only difference, however, was that authorisation to use section 47A powers required a senior officer to “reasonably suspect that an act of terrorism will take place” and considers that “(i) the authorisation is necessary to prevent such an act; (ii) the specified area or place is no greater than is necessary to prevent such an act; and (iii) the duration of the authorisation is no longer than is necessary to prevent such an act.” After that, there was very little real change: section 47A still did not require a police officer to have reasonable suspicion that a person was a likely terrorist.

Stop and search in the Protection of Freedoms Bill is covered under sections 58 to 63 of the draft legislation, which is currently working its way through Parliament. Subject to any amendments, its wording is currently identical to the existing section 47A powers. In this sense it is not “new”, but what is interesting is that last month, a Home Office Statistical Bulletin revealed that police have ceased using anti-terrorism stop and search powers completely. From April to September 2011, a period that included a royal wedding and a host of different street protests, there was not a single section 47A search. Why hang on to section 47A in the name of “protecting freedom”.

The Olympics has provided an ideal opportunity for the police to turn east London into a semi-militarised zone. There seems little doubt that places like Stratford will be designated as specific areas where there is “reasonable suspicion” – the whole Olympics security industry has been telling us an attempted attack on the Games is almost inevitable. The Protection of Freedoms Bill will become law just before the start of the Olympics and it is therefore highly likely that anti-terrorism stop and search “necessary to prevent” a potential outrage will return with a vengeance over the summer.

In an area like Newham, it is obvious who the candidates for such stops and searches are likely to be. When pressed by Newham Monitoring Project recently to explain the likely impact of the Olympics on the use of all the different stop and search powers on black and Asian residents, the local police were reluctant to respond.

What these powers replace is essentially little different from what preceded them, but they will emerge refreshed and reinvigorated from the cleansing influence of a “successful Olympic security operation”. All this happens, with typical British hypocrisy, under the guise of “protection of freedoms”. No wonder efforts to restrain the growth of more and more unnecessary police powers often feels like a war of attrition.

No Protest at the Olympics?

At the beginning of March, the Metropolitan Police Assistant Commissioner (and National Olympic Security Co-ordinator) Chris Allison told the Guardian that his officers are monitoring Twitter and other social media for signs of disorder and, in particular, for organised protest, but “there doesn’t appear to be anyone who wants to protest against the Games.”

This seemed like a pretty bold statement to make given there have been demonstrations of some sort in every previous Olympic host city.  Even if Allison were at least partly right and no-one “appeared” to want to protest, is anyone wondering WHY so little has been formally announced, with just over two months to go before the opening ceremony?

Anyone planning to exercise their right to assembly freely and to express their views publicly by staging a protest will wonder whether taking part in protest, even entirely peaceful acts of dissent, is an increasingly dangerous choice – and whether the greatest threat to their safety comes from the highly aggressive uniformed officers who surround them. In these circumstances and with an evident intention to deliver the “perfect” Games, one that from the police’s point of view is incident-free, why would anyone concerned with their safety choose willingly to mark themselves out as a “protest organiser”, a target for the next two months, by announcing anything now?

The Met’s recent heavy-handed approach to the policing of protest will have the direct result of sporadic, mobile affinity-group demonstrations that are unlikely to be widely publicised on Facebook or Twitter but organised by people who know and trust each other.

Ironically, by making it so difficult for larger numbers to demonstrate effectively during the Olympics, the direct consequence may be protests that the police find impossible to contain. Frankly, they have no-one to blame but themselves.

• Visit Random Blowe on www.blowe.org.uk and for more information about NMP visit www.nmp.org.uk.

Only radical action can start to address the housing crisis escalated by the Con-Dem Government says Peter Gilman, Islington South CLP.

Since the Tories got back into office we have had record unemployment, especially youth unemployment, record increases in the price of food, gas, electricity and fares – and now the price of stamps is going up to subsidise the privatisation of the Post Office. We have had savage cuts in local authority funding, and Tory plans for health will bring about the destruction of the NHS.

In the Budget, the Tories gave millions in tax concessions to millionaires and Britain’s richest 1% – and paid for it by robbing Britain’s pensioners with the granny tax. As fuel prices rise, the Government has cut pensioners’ heating allowance by 20%.

The Tories want to increase rents to 80% of market levels for council and housing association tenants. In inner London this would mean rents increasing to £350-£400 a week. Iain Duncan Smith’s claim that the Tory housing policy will reduce private sector rents flies in the face of all reality – and the experience of private sector tenants whose rents are soaring. The Tory plans are a recipe for a massive increase in homelessness and, combined with cuts in housing benefit – have led to the beginning of “social cleansing” of working class people from inner London.

We must never forget that none of this would be possible without the Lib Dems’ steadfast support for the Tories, but it is not enough to condemn the Tories and their Lib Dem poodles. We need positive policies from Labour, and nowhere is this more urgent than in housing. Unfortunately this is one issue on which any vision from Labour’s front bench is sadly lacking.

To deal with the current crisis we need a socialist housing programme that includes the following key points;

• A moratorium on rent increases, ie a rent freeze, after which rent increases for social housing, both council and housing association, should never go above the rate of inflation. Every year for the last 30 years rents have risen substantially faster than the rate of inflation. As a proportion of income, rents in Britain are the highest in the EU by a huge margin.
• Protection of tenure to be maintained for all those in social housing and increased protection for all those in private rented accommodation.
• A substantial increase in the building of new social housing with the emphasis on council housing. This is not only necessary to deal with the appalling housing shortage but will stimulate the economy and help reduce unemployment. It can also be used to provide apprenticeships for many of Britain’s young unemployed.
• A cap to be introduced on all private sector rents.
• Additional help for the first time buyer.
• The setting up of a body to investigate and curtail the blatant profiteering of landlord companies and estate agents. Many people buying or renting in the private sector are being ruthlessly ripped off.